How to Become a Financial Planner

Becoming a financial planner or advisor can be an extremely lucrative and rewarding career option. Not only is it worth it for the benefits, but the ability to help people improve their financial circumstances and reach their financial goals can be extremely rewarding. With an average salary of $65,454 per year, greater than the national average, this career can allow you to make money while enjoying helping others. However, there are specific steps that need to be taken in order to leap into this growing career. 

Basic Underlying Qualifications 

Each state has different qualifications needed to satisfy the requirements for this career. One must be up to date with their education, their examinations, experience, and ethics requirements. Having the education and learning about financial planning topics is very important; basic business concepts and basic knowledge of financial markets in various industries can put you ahead of other applicants when applying for a financial planner or advisor jobs. 

Education

Getting a degree in a related financial field will help you understand client challenges and circumstances to help build optimal solutions for them. Aspiring financial planners and advisors may want to consider getting a degree in accounting, finance, or a specialization related to financial services. A four-year bachelor’s degree is enough to satisfy most requirements for financial planning and advisory firms, but a higher education graduate degree will improve your chances of employment for larger firms. Taking classes in Accounting, Business Law, Business Communication, Ethics, Marketing, Finance, Risk Management, Investment, and Taxation can all help positively influence your learning, with some of those topics being more important than others. 

Sponsorship

Taking exams on one’s own can be expensive and time-consuming; having a firm sponsor you to take those exams is a favorable option. Not only can they completely cover the exam fees, but they can also offer courses and classes with hands-on instruction to help you understand and learn how to become a financial planner or advisor. In these courses, regardless if they are online or in-person, you will get to meet other aspiring financial planning professionals that can help support you and help build your professional network. 

Exams

Because the position is directly tied to individual finances, financial planners and advisors must be tested and trusted to ensure they know all of the latest regulations and rules surrounding estate planning, retirement planning, taxation, and investment, among other topics. They need to be up to date with all of the latest financial planning strategies, software, and cost-saving tactics to favorably suit their clients so they can be in the most optimal position. Multiple specific licenses, called securities licenses, are required to work with clients. These licenses differ by state and vary based on the products that your firm works with, the types of clients you assist daily, and the requirements of your financial planning or advisory firm. In most states, you are required to take the Series 65 (Uniform Investment Adviser Law Examination), the Series 7 (General Securities Representative Examination, which requires a FINRA-member firm sponsorship), and the Series 66 (Uniform Combined State Law Examination). 

These exams can help you earn specific financial designations like Certified Financial Planner (CFP), Chartered Investment Counselor (CIC), Personal Financial Specialist (PFS), Chartered Financial Analyst (CFA), and Chartered Financial Consultant (ChFC). These designations signify that you are a finance professional and are legally able to act as a fiduciary for clients. It also states that you are exempt from taking the above tests if you already have the designation from a different field or industry. 

Pay Investment Advisor Fee

Each year, depending on your state, one must pay a fee for the “investment advisor registration.” It varies by state. Using Texas as an example, you would be charged $75 for the first year and $40 for the years after to renew your license. All fees must be paid through the Investment Adviser Registration Depository (“IARD”) system.

Mentorship 

Once all examinations have been passed, you may begin to legally accept clients. However, real-world experience cannot be learned from exams, so meeting with clients can be a challenge when just starting. This is why with most firms, you will be paired up with an experienced financial advisor or planner who will mentor and train you on how to help clients through on-the-job training. Learning from an experienced professional can be very beneficial as they walk you through various situations and financial circumstances involving a client. 

As you gain more experience, you will be allowed to take on more clients individually, fill out necessary paperwork without assistance, and lead client calls or meetings while the experienced advisor takes notes on your performance. The advisor is there to support your professional development and education and will review your performance with you regularly after each client visit. 

Continuing Education 

Initially, passing these licensing exams is essential, but continuing your education and improving your professional financial abilities is equally, if not more important. To continue to maintain your licenses, you are required to take education classes either online or in person. These classes will allow you to be up to date with the latest changes in laws, regulations, and financial planning or advisory practices. It will also allow for reminders on various financial planning scenarios you may not often see in your professional career. Additionally, these classes may often cover unconventional topics, like ethics, which can be very important when working with clients but are not often discussed or taught to financial planners or advisors. 

If required classes are not completed on time, your license may get suspended or revoked, resulting in the loss of ability to work with clients as a financial advisor. 

Many financial advisors continue to advance their education through additional certifications, licenses, and degrees. This education helps them improve their financial planning skills, practices, and strategies to better serve their clients. Further education can also help when deciding to specialize in specific niches within the financial planning industry or opening your own practice. 

Start Booking Clients

After completing all of the requirements required of you to become a financial planner or advisor and receiving approval from your firm through their mentorship program, you can start booking appointments with clients. Many new financial advisors begin by working with family, friends, and former co-workers. Through satisfied customers, you will receive referrals for new opportunities and clients, which will allow you to begin growing your business into a prosperous career. 

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